EghtesadOnline: The European Union says more nations, both from in and outside the EU, have announced willingness to join the financial mechanism, known officially as Instrument in Support of Trade Exchange (INSTEX), designed to trade with Iran.
EU foreign policy secretary general Helga Schmid said Thursday that beyond the 10 EU nations that are already part of the system, “we now have seven more member states that have announced they will either join the shareholders or use INSTEX,” The Guardian reported.
Apart from the three EU member nations, Britain, Germany and France (E3), that are part of the landmark nuclear deal signed between Iran and six world powers in 2015, seven more EU member states have recently committed to take part in the trade mechanism.
Schmid said, apart from EU nations, there are non-EU members that will be taking part in the mechanism established in a move to improve non-dollar trade between Europe and Iran, Financial Tribune reported.
“From consultations I had last week, I can share with you that more, also non-EU member states, will join,” she said.
As part of attempts undertaken to protect Iran’s economic interests acquired as per the terms of the nuclear deal, the E3 created INSTEX in February.
INSTEX is aimed at facilitating legitimate trade with Iran by circumventing sanctions re-imposed by the United States after President Donald Trump pulled out of the deal a year ago.
It allows trade with Iran without any direct financial transfers between them. The mechanism also eliminates the need to use the banking platform SWIFT (Society for Worldwide Interbank Financial Telecommunication), which had sharply curtailed the international activities of Iranian banks.
After creation, the mechanism was in limbo for about five months before Europeans announced in a statement in late June that INSTEX is finally operational and is processing the first transactions. The E3 confirmed in the statement that some EU member states are in the process of joining INSTEX as shareholders.
At the same time, they announced plans to invite operators from third countries, including Russia, to join it.
‘A Beautiful Car Without Fuel’
Iranian authorities welcomed the undertaking as a step taken by Europeans to save the nuclear deal. However, they have always complained that the mechanism is too limited and too insufficient to ensure Iran reap its economic benefits as enshrined in the deal, simply because the INSTEX will not cover goods that are under US sanctions, especially oil and oil products.
Soon after the EU said that INSTEX was operational, Iran's ambassador to the United Nations, Majid Takht-Ravanchi said Europe should take further measures to ensure that the special trade channel satisfies Tehran's demands.
“I personally believe that INSTEX, in its current condition, isn't enough. This mechanism without money is like a beautiful car without fuel," the official said.
Likewise, the governor of the Central Bank of Iran Abdolnasser Hemmati implicitly hailed INSTEX while noting that the sustainability of the mechanism would be contingent on shifting it from a framework determined by US sanctions to one covering trade in all goods allowed under the nuclear agreement.